While "risk-on, risk-off" has been an oft-repeated mantra in this period of extreme monetary policy machinations, it would appear the most relevant factor in the last six months is in fact "Abenomics-on" as a concerted plan to devalue the JPY has provided ammunition for carry traders to rampage through every dismal risk asset in the world. After collapsing through the Maginot Line of 100 on May 9th, JPY has rallied back and spent the last two weeks fighting over 101. It appears, given today's shift back under 100 that, for now, Abe is going to need a bigger boat. It seems, as with the Fed's balance sheets, that it's not about the 'stock' of USDJPY (level) but the 'flow' (depreciation rate) if risk assets are to continue their march ever higher in the face of a not-so-bullish reality. As one would expect, NKY futures and US (and European) equities are fading fast along with this 'driver'.
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Intraday we tested down to near 100 earlier, bounced, and now fading fast...
[7]
Nikkei futures are fading fast.
Charts: Bloomberg